“…it is really important to consider the distinction between a stock panic and a stock-market crash. Although used interchangeably by most investors, they are very different events…

“…we witnessed in late 2008, a bubble in fear …in this hyper-fearful environment, investors dumped stocks at frightening rates to raise cash… As this choking fear spread to banks, they quit lending so credit dried up. This is classic panic stuff.

“Meanwhile a crash is ‘a sudden general collapse of the stock market’. Technically crashes are more extreme than panics, a 20% decline in major stock indexes in 2 days (3 at most). During 2008’s panic, the SPX’s biggest 2-day and 3-day declines were just 12.4% and 13.9%. Bad, no doubt, but still nowhere close to the classic 20%+ crash metric.”

And the difference is more than semantic! From Hamilton again:

“Crashes emerge suddenly off of very high stock prices after a powerful secular bull. As events spawned from euphoria, they generally aren’t taken too seriously at the time. Within the weeks immediately after, enthusiastic bulls are aggressively buying “the dip.”

(Remember how the 1987 crash was re-bought almost immediately? Not so 2008!)

“…Conversely panics cascade into existence in weak markets. They happen near the ends of bears off of already-low stock prices. They slowly evolve over months, not days like crashes. They lead to such morose sentiment that nearly everyone assumes the panic-driven stock lows are going to persist indefinitely.”

Sorry to be pedantic, but I do think it’s an important difference!

Also: love Jeff Berwick, have seen him speak several times, but I find his commentary to be a superficial broad brush that any weekend warrior on a gold/silver forum could come up with. Germany shipped their gold here because of World War II? We were fighting Germany then… I think maybe it was because of the threat from the USSR during the Cold War, no?!?

Lastly, Phil, your commentary and the research you do comes through in your questions and witticisms — I’m thinking that you are as well or better educated on the topics than many of your guests! And I really enjoy your banter with them.

Best wishes; yours is the best investment programming on the internet, in my opinion!
Dirk Burhans

I like Berwick for his talent as an orator. He’s very good at communicating ideas. More than that, he has street wisdom and humility. Some commentators are knowledgeable but painful to follow because they can’t stop stroking their egos. It suggests a pampered background and undermines their credibility. Berwick is a real entrepeneur and puts his money where his mouth is. His material on offshoring is superb. Rgds